What are the differences between the Austrian and mainstream definitions of inflation?

Austrian = increase/decrease in money supply

Mainstream = rising/falling prices. Politicians like this one because the negative effects of their monetary polices take longer to be seen. Also since, this definition is much harder to measure, its another reason its ******ed.

Not sure why we are even talking about this. Clearly everybody ITT is using the mainstream definition.

Of course inflation should be a measure of how prices change over time. That's what the word means and more importantly what people actually care about.

You said this earlier:

Sounds pretty Austrian to me, as per hippo's definitions.

We actually agree that separating the different causes of price fluctuations leads to a better economic analysis. That's the Austrians' point: they obviously don't deny the existence of the many mechanisms that affect the price level that fall under the mainstream definition of inflationary/deflationary forces, they just see it as counterproductive to describe them all with one label because of the separate diverse effects they have on the health of an economy.

I figured that's where clowntable was going. I apologize for either stealing his thunder or completely missing his point

Seeing people argue that deflation is bad never gets old.

thats a pretty arrogant claim to make from a dude that just posted this gem:

Is this inflation?

Dollar went up vs. a bunch of other fiat currencies, so what?

Everybody, including me, has implicitly (and in some cases explicitly) defined inflation/deflation as the broad increase/decreases in the prices of many goods. Exactly what he claimed the mainstream definition is. Sure...it sucks that it isn't easy to calculate, but we can't let that force us into an easy to determine definition for it that is wrong.

Actually, as per hippos "Austrian" definition, inflation/deflation is a function of a single variable, money supply. Of course nobody itt actually used that definition when talking about inflation because it makes no sense in terms of intuitive definitions of what people have in mind when they say "inflation".

I'm positive deflation being bad isn't much of an argument. It's pretty widely established that sustained deflation is disastrous for an economy.

Keynesian economics is also widely established.

am I just too ****ed up on percocet to use the god damn internet or are the mises forums down and unable to be posted on aorn?

my ****ing god this god damn mother ****ing **** I'm about to just ****ing say **** it god damn

Deflation is similar to having a fever. The increase in body temperature isn't by itself that bad....it's just that when it happens it almost always means something is wrong.

You can make up ridiculous scenarios where there would be massive deflation and things would get alot better (somebody finds a way to cheaply turn dirt into oil etc) but when widespread deflation has actually been observed in modern economies it likely is caused by some underlying sickness.

My guess is yes.

freak out more

The dollar index is mainly an inverse Euro index.

Yeah, when the value of your mortgage and all your assets start deflating, you will be on easy street.

If you don't understand why deflation is bad, you just might be an Austrian, and you certainly will be broke.

hello

you know we had deflation during the industrial revolution right?

+1 and most people make comments based upon the fact that they think their Econ 101 teacher and textbook were flawless.

Actually I think more people are making comments based on not even understanding their Econ 101 textbook.

We also had recessions and financial panics the entire time:

1869–70 recession
Panic of 1873 and the Long Depression
1882–85 recession
1887–88 recession
1890–91 recession
Panic of 1893
Panic of 1896
1899–1900 recession
1902–04 recession
Panic of 1907
Panic of 1910–1911

http://en.wikipedia.org/wiki/List_of..._United_States

Uh, yeah, I'm right about that quote too? Inflation is when money gets cheaper.

But they do describe them all with one label, and they think there's just one mechanism that affects inflation? Austrian inflation is much simpler and easier to calculate than mainstream inflation.

LOL you are so pretzeled up on this **** you forgot which side you were one.

Actually, I think most never took Econ 101.